Does Bath Tune Up engage in intercompany transactions with its Parent company?

According to Bath Tune Up's 2025 Franchise Disclosure Document, Bath Tune Up engages in intercompany transactions with its Parent company, Home Franchise Concepts, LLC. These transactions are reflected in the "Due from Parent" balance within the member's equity section of the balance sheets. These transactions primarily involve cash transfers between Bath Tune Up and its Parent, net of allocated costs.

For a prospective franchisee, this means that Bath Tune Up's financial statements are affected by its relationship with its Parent company. These intercompany transactions can include allocations of operating expenses from the Parent to Bath Tune Up for services such as legal, IT, finance, marketing, and human resources. These expenses are allocated based on the percentage of overall gross profit contributed to the Parent.

In 2022, the Parent allocated $2,822,097 in expenses to Bath Tune Up, which were charged to the company's operations, mainly included in operating and administrative expenses. As of December 31, 2022, Bath Tune Up had a net payable due from its Parent in the amount of $6,119,658, resulting from various intercompany transactions. This amount is presented as a component of equity in the accompanying balance sheet.

It is important for a potential Bath Tune Up franchisee to understand these related-party transactions, as they can impact the company's financial performance and position. Understanding how costs are allocated and the nature of the intercompany balances can provide a clearer picture of Bath Tune Up's financial health and its relationship with its Parent company.